Retirement Age Considerations: What You Need to Know

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Written by Dar

July 10, 2024

Thinking about when to retire? This big decision affects your money, health care, and happiness. With different ages for Social Security, Medicare, and taking money from retirement accounts, planning for retirement can seem tough. But don’t worry – knowing what to consider can help you make a smart choice and enjoy your retirement.

Key Takeaways

  • The average retirement age in the U.S. has risen from 60 in 1995 to 66 in 2022, with actual retirement age increasing from 57 in 1991 to 61 in 2022.
  • Retiring at age 65 allows you to qualify for Medicare benefits, while Social Security benefits can be claimed as early as 62 with a reduced amount.
  • The required age for minimum distributions on select retirement accounts was raised to 73 years old as part of SECURE 2.0.
  • Individuals retiring at age 65 should aim to have saved 10 times their pre-retirement salary.
  • Delaying Social Security benefits beyond age 70 does not increase benefits further.

Understanding Retirement Age Milestones

Planning for retirement means knowing the key age milestones that affect your finances. These include social security benefits, required minimum distributions (RMDs), and medicare enrollment. Understanding these can make your retirement smoother and more successful.

Key Takeaways

You can start claiming social security benefits at 62, but you’ll get less money. If you wait until 66 or 67, depending on when you were born, you’ll get the full amount. At 65, retirees get Medicare benefits, which cover important healthcare costs. The SECURE 2.0 Act also changed the required minimum distributions age to 73, giving you more control over your savings.

“Understanding these key milestones can help you plan for a successful retirement.”

Knowing about retirement age milestones helps you make smart choices for your money. This means getting the most from social security benefits, managing required minimum distributions, and getting ready for Medicare enrollment. Being informed and proactive is key to a great retirement.

Early Retirement: Considerations and Strategies

early retirement

Many people think about retiring early in their 50s and early 60s. The Social Security rules used to say you had to wait until 65 to get full benefits. Now, it depends on when you were born. Your retirement savings, health benefits, and when you start Social Security affect when you should retire.

If you retire before 65, you can take money out of 401(k)s and 403(b)s at 55. But, you’ll need a good plan for healthcare costs until you’re 65 and Medicare starts.

Starting Social Security benefits early means you’ll get less money each month. You can start taking money out as early as 62. The “rule of 55” lets you take money from a 401(k) or similar retirement plan without penalty if you leave your job at 55 or older.

It’s a good idea to spend no more than 4% of your retirement savings in the first year. This helps make sure your savings last 30 years.

Looking at your expenses and maybe downsizing can help you spend less in retirement. You might keep your company health insurance through COBRA or look for new coverage after you stop working. Finding the right mix of investments is also important to manage risk in early retirement.

“The earlier you start saving and the more you save, especially in tax-advantaged accounts, the higher the likelihood of achieving early retirement.”

Talking to financial experts can help figure out the best investment mix for you. This can help grow your money and keep risks low. Retiring in your 50s is a good goal for early retirement planning. Putting more money away can mean you need less for retirement.

It’s important to think about your monthly costs to make sure they’re less than your income. This includes pensions, Social Security, and savings. Saving enough for the first five years of retirement can protect your money from market ups and downs.

Full Retirement Age: Maximizing Your Benefits

full retirement age

The age you retire can greatly affect your Social Security benefits. If you retire at your full retirement age, which is between 66 and 67, you get the highest benefits. Waiting until then means you get your full monthly benefit, which can really help your retirement income.

Social Security and Medicare

At 65, you can get Medicare, which is cheaper than private health insurance for older people. Knowing about Social Security and Medicare, including Medicare Advantage and other parts, helps you get the most from your retirement.

If you take Social Security early, your monthly payments will drop by 25% to 30%. But, if you wait longer, your payments can go up because of delayed retirement credits.

“Retiring at your full retirement age can make a significant difference in your monthly Social Security benefits.”

Understanding Social Security and Medicare can seem hard, but it’s worth it. By thinking about your full retirement age and your options, you can make smart choices. This way, you can get the most benefits in your retirement.

Delayed Retirement: Potential Advantages

delayed retirement

Delaying your retirement can bring many benefits. Working longer lets you save more for retirement savings. This means you could live better in your later years.

Waiting until you’re 70 to start getting Social Security benefits can really boost your monthly payments. For every year you wait, your benefits increase by 8%.

Working longer also means you keep your healthcare coverage longer. This can lower your medical costs before you start Medicare. It’s great if you have health issues or a family history of them.

“Delaying retirement from age 66 to age 67 can increase retirement income by 7.75%.” – Retirement Age Considerations: What You Need to Know

Not everyone can work longer, though. 45% of early retirees stop working because of health or job changes. But for those who can, the benefits of delaying retirement are big.

Think about your health, family history, and money when deciding to delay retirement. Talking to a financial expert can help make a plan that works best for you.

Planning for Healthcare Costs in Retirement

healthcare costs in retirement

As you get closer to retirement, healthcare costs become a big worry. Medicare starts at 65, but if you retire early, you might need to pay for health insurance. Knowing about Medicare and extra coverage can help you get the right healthcare in retirement.

Medicare and Supplemental Coverage

The average cost of Medicare Advantage (Part C) is $18.50 a month in 2024. The standard Medicare Part B premium is $174.70. Prescription drug coverage (Part D) is about $34.70 a month. Many retirees buy Medigap supplemental insurance to cover extra costs.

For a typical couple aged 65 retiring in 2023, healthcare costs are around $315,000. This doesn’t include long-term care, over-the-counter meds, or dental care. It’s important to save enough to cover these healthcare costs in retirement.

“Only 41% of adults aged 60 and over feel confident that their retirement savings are on track.”

Retirees might look into extra insurance like Medigap plans to fill coverage gaps. These plans cover costs not paid by Medicare Part B and Medicare Part D.

Planning well and knowing about Medicare and extra coverage can make sure you’re protected for your healthcare needs in retirement.


Planning for retirement means looking at key age-related milestones and benefits. This includes Social Security, Medicare, and how to manage your retirement accounts. Knowing these things helps you decide the best time to retire. It also helps you plan for a happy and secure life after work.

With people living longer, deciding when to retire is now more complex. Your health, money situation, and personal dreams are all important in planning for retirement. By keeping up with changes in retirement plans and planning ahead, you can make sure your retirement is comfortable and fun.

Finding the right retirement age is a personal choice that needs careful thought. By understanding the different milestones and benefits at each age, you can make a smart choice. This choice will help you enjoy a fulfilling and financially secure retirement.


When can I start claiming Social Security benefits?

You can claim Social Security benefits at 62, but you’ll get less money. Waiting until 66 or 67 gets you the full amount.

At what age do I qualify for Medicare?

At 65, retirees get Medicare, which helps with healthcare costs in retirement.

What is the SECURE 2.0 Act and how does it impact retirement accounts?

The SECURE 2.0 Act changed the rules for taking money out of retirement accounts. Now, you must wait until you’re 73 to start taking required minimum distributions.

What are the key factors to consider when deciding on the best time to retire?

Think about your savings, health benefits, and when you can start Social Security. If you retire before 65, plan for healthcare costs until Medicare starts.

What are the benefits of waiting to retire until age 66-67?

Waiting to retire at 66-67 gets you full Social Security benefits, based on your birth year. You also get Medicare at 65, which is cheaper than private health insurance for older people.

What are the advantages of continuing to work past the traditional retirement age of 65?

Working past 65 boosts your retirement savings and increases your Social Security payout if you wait until 70. You’ll also have Medicare before leaving your job.

How much do healthcare costs typically run in retirement?

Medicare Advantage costs about .50 a month in 2024, and Medicare Part B is 4.70. Part D for drugs is .70. Many buy Medigap to cover extra costs.

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